LJWorld.com / Senate panel OKs security audits

Archive for Friday, February 2, 2001

By John Hanna, The Associated Press

February 2, 2001

Topekav — A Senate committee wasted no time in endorsing a bill requiring security audits of the Kansas Lottery at least every three years.

Some members of the Federal and State Affairs Committee said the bill should make legislators more comfortable about extending the lottery's life past July 1, 2002, when it is set to go out of business under state law.

www.kslottery.comv

The committee had a hearing on the bill Thursday morning and agreed to make technical changes, which members wanted in writing before they voted.

Instead of waiting five days for the committee's next scheduled meeting, Chairwoman Nancey Harrington, R-Goddard, called a special one and convened it in the rotunda after Thursday afternoon's Senate session.

The committee endorsed the bill on a unanimous voice vote.

"If we don't have security audits, we have the opportunity for all sorts of bad things happening," said Sen. Kay O'Connor, R-Olathe. "This definitely raises the confidence level."

The lottery has been under scrutiny because of the prosecution of Richard Lee Knowlton, a former employee accused of stealing nearly $63,000 from the agency over 18 months, ending in March 2000. Knowlton's trial in Shawnee County District Court on 268 charges is scheduled to begin April 30.

The attorney general's office alleges Knowlton altered dozens of "instant win" scratch-off tickets, as well as their corresponding computer records, to create bogus prizes for himself.

Knowlton denies having criminal intent, but he acknowledges altering 12 tickets and redeeming 11 of them. He says he was trying to demonstrate flaws in the lottery's security.

The lottery had planned a security audit in 1999 but postponed it because, Executive Director Ed Van Petten said, it couldn't find a qualified firm.

Van Petten initiated a new audit, expected to cost $83,000, that he said should be completed by the fall.

The bill would require another security audit by the end of 2004 and every three years after that. Current law says only that the lottery must do security audits "periodically."

Van Petten said he initially was concerned that the bill represented an attempt by the Legislature to become more involved in the lottery's day-to-day management. The security audits would be directed by the Legislative Division of Post Audit under the bill.

But he said legislators assured him they only want to see regular security audits.